Weigh pros and cons of association lawsuits

August 09, 2013|Pamela Dittmer McKuen | Community Living

When bad things happen to a community association, sooner or later someone is bound to say, "Let's sue." Sometimes going to court is the best and perhaps only way to resolve a serious problem. Usually it isn't.

"The TV shows make filing lawsuits very simple, and cases get resolved overnight," said Jim Stoller, president of The Building Group management company in Chicago. "In fact, they take lots of time and lots of money, and they are almost always settled outside of court."

Association-initiated lawsuits tend to be directed toward two categories of defendants: One is association owners, and the other is contractors and developers. Some cases are stronger than others.

Most lawsuits against owners will be for either nonpayment of assessments or violation of rules or restrictions. When the infractions are well-documented, and the appropriate legal procedures have been followed, associations are likely to win. They also might be awarded attorney's fees and fines, particularly when their declaration or state statutes provide for it.

"The association board has an obligation to enforce its governing documents," said attorney James Slowikowski of Dickler, Kahn, Slowikowski & Zavell Ltd. in Arlington Heights. "If someone is violating restrictions on, say, dogs or fences, and the board can't get compliance through nonlitigation means such as demands or the fine process, they have no choice but to file a lawsuit."

The chanciest association-to-owner cases are those that dispute matters of interpretation or aesthetics, said attorney Robert Prince of Keough & Moody PC in Naperville.

For example, this type of suit might charge that an owner's yard is messy or his new fence doesn't fit in with the architecture of the community, he said.

"In today's economy, it's difficult for a judge to say (to a defendant), 'I'm going to make you do something because your home looks a little out of the ordinary,'" he said.

Lawsuits against contractors and developers often involve work that was done poorly or not at all. Developers also sometimes are sued for documents and other information that wasn't provided when the association was turned over to the owners.

"If you're talking about a huge problem such as a roofing defect that will cost hundreds of thousands of dollars to fix, obviously, litigation to recoup the loss will cost far less," Slowikowski said. "But in many cases, you'll spend more money on lawyers and litigation than you would spend to take care of the problem yourself."

Even if you win, you won't necessarily recover your attorney's fees and other expenses, he said.

Cost is a major consideration when deciding whether to file a lawsuit, Stoller said.

"It's not just the attorney's hourly rate," he said. "There are filing fees and discovery costs that can add up to tens of thousands of dollars. Ask the attorneys what their feeling is about your chance of success. You really want a rock-solid case before you start."

"It's always a risk," said Slowikowski. "There are no slam dunks."

Another consideration is the time. Lawsuits can drag on for years. Meanwhile, witnesses sometimes move out of the community and lose interest in the case, or their memories fade. Board members come and go, and new ones might not understand what the fuss is all about.

The process can be stressful on board members, who may have to testify or answer to owners without going into detail because of confidentiality issues, Slowikowski said.

"If you aren't prepared to take the case all the way to resolution or settlement, you are wasting your money to have me start something," said Prince said.

Whatever the dispute, the best approach is to settle it without attorney intervention, said Prince.

"Sometimes you can get a good resolution by giving people the opportunity to come to a meeting where they can explain their issues and try to work it out among themselves," he said.

When that doesn't work, a professional mediator can help bring about resolution in less time and at lower cost than litigation, he said.

"Explore all the alternatives," said Stoller. "When necessary, litigate, but only after you have exhausted all other avenues."